John Lee at Chart Gone Wild has put together a set of slides that look at Jesse Livermore’s trading style and he has updated it for today’s trader or investor. Take a look and you will see the real genius of Livermore’s style. It is actually conservative. Keep in mind, there were no charts or computers back then.

G’day all! Have a listen this podcast. Eric King talks to Robin Griffiths, one of the world’s best technical strategists. Robin Griffiths is Cazenove Capital Management’s Private Wealth Strategist -Robin has 44 years investment experience and is considered to be one of the top strategists in the world.

Robin developed his own system, analyzing stock and market trends. He is followed globally because of his ground breaking work on world stock markets, bonds, currencies and commodities.

Cazevone as a group now manages nearly £15 billion on behalf of their client base. His analysis is gloomy to say the least , especially for 2011.

Robin gives exact dates to watch out for as well as thoughts on gold, ENJOY!

Graham gets it. This is why I’m willing to share his work, and this is one of the best pieces he’s written showing exactly how he gets it. Puppet masters, distracting issues, oligarchs taking your money, controlling our politics, and controlling our minds… All true, but the corporate oligarchs to which Graham refers in turn are controlled by an even narrower group of elites who are the ones who control corporations with their debt money – the central bankers, the DEBT PUSHISHING KINGPINS.

I read both of these documents in about 15 minutes; they are focused on the root issues of corporate power and control and presented in a way that is easy to understand. The issues Graham explores are ones that I have devoted much time to writing about and developing potential solutions. The key solution here from my perspective is to separate special interest money from politics – an important part of Freedom’s Vision. Limiting special interest money influence would go a very long way to limiting the power and control of corporations that has grown so wildly out of control. The very purpose of allowing corporations to form has been forgotten and subverted; sharing information like this will hopefully lead to people opening their minds to see the programming behind the curtain…

Equity futures are flat to down slightly following yesterday’s 98.2% NYSE volume rout (sixteen 90%+ days now since mid-April, 10 on the down side). Again, this shows a lack of liquidity in the market, very few real players and mostly HFT players are left. Bonds are slightly higher continuing what appears to be a now parabolic move up in price, down in yield. Oil is flat, and gold is now trying again to break up trending support. The dollar fell substantially overnight, but is recovering, nearly back to level despite the U.N. calling to scrap the dollar as the world’s reserve currency and have the IMF replace it with other international “liquidity transfers.” LOL, this is the central bankers standing there exposed for you to see… it shows you where their lairs are (IMF, U.N., BIS):

(Reuters) - A new United Nations report released on Tuesday calls for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.

But several European officials attending a high-level meeting of the U.N. Economic and Social Council countered by saying that the market, not politicians, would determine what currencies countries would keep on hand for reserves.

"The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," the U.N. World Economic and Social Survey 2010 said.

The report says that developing countries have been hit by the U.S. dollar's loss of value in recent years.

"Motivated in part by needs for self-insurance against volatility in commodity markets and capital flows, many developing countries accumulated vast amounts of such (U.S. dollar) reserves during the 2000s," it said.

The report supports replacing the dollar with the International Monetary Fund's special drawing rights (SDRs), an international reserve asset that is used as a unit of payment on IMF loans and is made up of a basket of currencies.

"A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency," the U.N. report said.

The report said a new reserve system "must not be based on a single currency or even multiple national currencies but instead, should permit the emission of international liquidity -- such as SDRs -- to create a more stable global financial system."

"Such emissions of international liquidity could also underpin the financing of investment in long-term sustainable development," it said.

MARKETS DECIDE

Jomo Kwame Sundaram, a Malaysian economist and the U.N. assistant secretary general for economic development, told a news conference that "there's going to be resistance" to the idea.

"In the whole post-war period, we've essentially had a dollar-based system," he said, adding that the gradual emission of SDRs could help countries phase out the dollar.

Nobel Prize-winning economist Joseph Stiglitz, who previously chaired a U.N. expert commission that considered ways of overhauling the global financial system, has advocated the creation of a new reserve currency system, possibly based on SDRs.

Russia and China have also supported the idea.

Uh huh. Stiglitz is officially an idiot who would turn over the world to the debt pushers, as if their influence isn’t powerful enough already. This is absolutely the very last thing that the world needs and that WE should allow to happen – there is absolutely no need to have a global “liquidity exchange,” currencies can be exchanged in nanoseconds without it. It’s not about exchange, it’s about DEBT and CONTROL. Again, the WHO is in control is extremely important and it’s going to get down to THEM (central bankers) or US (the people who rightfully own the money system in each country). This absolutely solidifies my stance that the IMF and BIS need to be abolished alongside of the FED. Should the people fail to take them out, servitude is the future for our children.

Yesterday’s Consumer Confidence number was a disaster, falling nearly 17% in one month from 63.3 to 52.9! Here’s Econoday:

HighlightsThe Conference Board's consumer confidence report is a major disappointment, falling dramatically and showing regional weakness tied no doubt to the Gulf spill. The consumer confidence index fell to 52.9, in a nearly 10 point decline the size of which usually corresponds with an economic shock. The decline was led by severe weakness in the East South Central (37.7 June vs. 56.0 May) and the South Atlantic (49.1 vs. 62.8). But other regions are weak too including significant drops in the Mid-Atlantic and Pacific regions.

Consumers are now showing much more concern over the jobs market and over their income prospects, with the latter reading arguably the closest to the consumer psyche. Those saying jobs are currently hard to get rose nine tenths to 44.8 percent. The size of this rise isn't overwhelming but the direction is definitely troubling, only the second negative monthly comparison since November. For the jobs outlook, more see fewer jobs (20.8 percent vs. 17.8 percent) and fewer see more jobs (16.0 vs. 20.2). On the future income question, the unprecedented negative spread deepened between the optimists, now at 10.6 percent vs. May's 11.4 percent, and the pessimists, now at 17.2 percent vs. 16.4 percent. Consumers aren't going to be spending if they don't have confidence in their income.

Buying plans fell back sharply led by autos and including appliances. Buying plans for homes, already badly depressed, fell back some more. A slip in inflation expectations, the result of soft gasoline prices, is the report's only positive, at least a positive for the interest-rate outlook. Stocks are falling on this report, one that offers the first hint of significant economic trouble related to the spill and one pointing specifically to trouble for Friday's employment report.

Keep in mind that this confidence Index is based on the confidence in the year 1985 as the base year being 100! These numbers are horrific, and yes, they do correspond to the above article that mentions the dollar not being a store of value. Confidence – it is the basis of all money, regardless of WHAT backs it. This is what the majority of our politicians and debt pushers have failed to take into account. The Europeans just got a dose of it, don’t be surprised when confidence goes through a phase transition in regards to the dollar – I think it’s coming, but in the mean time the mechanics of deleveraging debt that is denominated in dollars continues to keep it elevated, relatively speaking, for now.

Speaking of a lack of confidence, the worthless MBA Purchase Application Index fell another 3.3% last week, but refinancing activity reportedly rose a ridiculous 12.6% - whatever, I really wish we could get an unbiased source of information! Here’s Econoday’s report of their biased report:

HighlightsPurchase applications for home mortgages weakened again in the June 25 week, down 3.3 percent and remain near 13-year lows. The weakness points to major trouble for June home sales which don't appear to be getting any lift at all from record low mortgage rates. But low rates are giving a boost to refinancing applications which rose 12.6 percent. The average for 15-year mortgages is at a record low 4.06 percent while the 30-year, at 4.67 percent, is at its lowest since April last year.

No credibility, “economic reporting” like this is nothing but another bruise to confidence in our system.

The ADP employment report came in weaker than the 55,000 job addition that consensus was looking for, falling all the way down to only 13,000. I don’t put much credence in this report either, the jobs data will come, of course, on Friday. This will likely lower expectations for it.

The Chicago PMI was just released and came in at 59.1, this was weaker than consensus and the prior month which were both at 59.7. Yet another indication that economic activity is slowing. The number is still above the “growth” demarcation of 50, for now.

The Baltic Dry Index continues lower after breaking support. Here’s a close in view that may not look as dramatic as the longer term plunge, but its recent down movement has wiped off an amazing 41% of this index. This is a leading indicator of economic activity:

Below is a messy 9 month chart of the SPX. The Head & Shoulder top formation is now well formed and is complete. The close yesterday was beneath the neckline in almost anyway you can draw it. It’s not what I would call decisive yet, but others believe so. Regardless, I think it’s playing out and the target is 860ish. Note on the chart that there are several down slopping support areas above 970:

The SPX and most indices closed right on the bottom Bollinger band. Although yesterday’s waves are not clear to me on the fine scale, McHugh claims that he can count it as a 5 wave structure which means that wave 1 of 3 of 3 of 3 is complete and we need to pause for wave 2. This will give the Bollingers a little time to get out of the way, but I don’t think it’ll be long as wave 3s move swiftly. The next wave will be yet another wave 3, now 4 levels of 3 which means that it’s likely to be a very powerful downwards thrust when it comes.

The S&P 100 index produced a "death cross" yesterday when the 50dma moved beneath the 200dma:

This is a very bearish sign. The S&P 500 will cross either Friday or early next week. Again, ominous, and a confirmation that a powerfull bear move is in progress - history says these crosses are not trifle. Also, yesterday the S&P 500 200dma turned negative. I did a study showing that once it falls by 1% then the odds of a powerful decline following is very high.

What you see from the U.N. recommending that the world depend on debt from the IMF is exactly what I’ve been warning about all along! That the central banking DEBT PUSHERS would use this crisis to swoop in and create a system that is even larger, more controlling, and creates nothing but more debt servitude for the entire world. This would be the opposite of freedom and must be fought at all costs! Your very freedom depends upon it, and the future of your children depend upon it. They should be in control of their own destinies, not the future generation of privileged world bankers!

Last time the S&P produced a Death Cross was back in 2008 when SP dropped to 666...Death Cross is when the 50 DMA moves below the 200 DMA line.

The Golden Cross is just the opposite, which is what you see on the chart below. Then we had that huge run up! NOW, it look like the 200 is getting perilously close forming another Death Cross. These are where the market has a LOT of price memory.

MA’s are not a system, they are a reading of Mr Market’s psychology. Never trade them alone, but use them as a thermometer for the health of the markets.

The Death Cross has a high rate of accuracy. From 1962-2008 there have been about 25 of which 13 of the past Death Crosses have resulted in declines of about 30%-55% ( Clark)

Keep an eye on the RSI 9 at around 60 into mid July. Stocks that rally into that could be sold. Do your own DD and research, this is just a kickstart for you.

On the surface, the last Monday in June has been no different than the other trading days in the first half of 2010. Investors have been dumping energy and materials ETFs; what’s more, they’ve been getting rid of country ETFs that depend heavily on the energy or materials sectors.

Sector ETFs In The First Half Of 2010 (Through 6/28)

6 Month Approx %

Industrials Select Sector SPDR (XLI)

2.4%

Consumer Discretion Select SPDR (XLY)

2.0%

Financials Select Sector SPDR (XLF)

-0.1%

Consumer Staples Select SPDR (XLP)

-1.3%

Technology Select Sector SPDR (XLK)

-6.3%

Utilities Select Sector SPDR (XLU)

-6.6%

Health Care Select Sector SPDR (XLV)

-7.3%

Materials Select Sector SPDR (XLB)

-9.9%

Energy Select Sector SPDR (XLE)

-12.2%

S&P 500

-3.8%

Country ETFs Heavily Dependent On Materials Or Energy (Through 6/28)

6 Month Approx %

iShares MSCI Chile (ECH)

7.1%

iShares MSCI South Africa (EZA)

-0.4%

iShares MSCI Canada (EWC)

-0.6%

Market Vectors Russia (RSX)

-4.8%

iShares MSCI Brazil (EWZ)

-10.2%

iShares MSCI Australia (EWA)

-10.8%

However, the reason that investors began selling energy and materials ETFs early in the year differs from the reason that they’re selling today. In the beginning of the year, for example, China’s tightening policy caused many to worry that demand for metals, minerals and oil might wane. Yet China has since shown that it is guiding its economy to a picture-perfect landing.

Flash forward to the May-June market swoon, and there are fears that the U.S. economy is weakening, not strengthening. Tack European austerity measures on top, and you have a recipe for a reduction in global demand for copper, steel, aluminum, fertilizers, pesticides, and timber.

Even if China demand proves stronger-than-expected… even if U.S. data supports the notion of economic recovery rather than refuting it… the dollar’s strength against the euro is yet another headwind. Commodities that are priced in dollars have become less expensive, hindering the total revenue for the companies that mine/drill/explore/transport/sell those commodities.

At the June lows (6/7/10), I cautioned investors about these headwinds for Materials ETFs. Not only is it important to recognize sector rotation, but it’s critical to refrain from falling in love with a singular theme; that is, investors loved the notion that worldwide stimulus would foster a self-sustaining global economic expansion dominated by infrastructure projects and natural resource-intensive endeavors.

How will you know when the global industrial cycle is kicking it back up a notch? How will you know when to rotate back into materials? You’ll need to see relative strength emanating from country ETFs like iShares MSCI Australia (EWA) and iShares MSCI Brazil (EWZ). Both show disappointing downtrends at this point in time.

Disclosure Statement: ETF Expert is a web log (”blog”) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. The company and/or its clients may hold positions in the ETFs, mutual funds and/or index funds mentioned above. The company receives advertising compensation from Invesco PowerShares Capital Management, LLC and Geary Advisors, LLC. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. Investors who are interested in money management services may visit thePacific Park Financial, Inc. web site.

Another keen observation from Graham that he sent to me yesterday BEFORE today's action - as always, it pays to keep your eye on the money as it moves from one asset class to another. Equities are usually the last to react...

I’ve written extensively about how US Treasuries are treated as a safe haven when things are not well in the world. I do think that at some point this will end (and there will be a flight from the Dollar), but right now Treasuries remain the “go to” place for investors when they want safety.

Because of this, Treasuries rally whenever investors get spooked. On that note, I want to point out that Treasuries (black line) have remained elevated throughout the last month, despite stocks (blue line) rallying.

Remember, the bond market is a much more sophisticated market than the stock market (it’s also twice the latter’s size). So the fact that bonds didn’t roll over when stocks rallied tells us that the “smart money” is spooked and doesn’t trust the stock rally at all.

Indeed, when you look at a long-term chart of US Treasuries, something VERY significant just happened:

For the last three years, US 30-Yr Treasuries have been trading in a clear-cut range (the exception being the spike that occurred during the Financial System Crash in late 2008/ early 2009).

So it is extremely and I mean EXTREMELY significant that Treasuries have recently broken out of this range. Even more significantly, the former overhead resistance line of the last three years is now acting as support.

This is a BIG deal. The last time Treasuries were at this level was November 2008. I think we all remember what happened then.

Does this mean we’re going straight into a full-scale Crash now? Not necessarily. But it does mean that the “smart” money is extremely worried and getting defensive now for what’s to come.

Scheherazade Also know as Shaza

(Updates with comment from former Sen. Paul Sarbanes and former Rep. Michael Oxley.)

By Brent Kendall and Fawn Johnson Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--A divided U.S. Supreme Court on Monday struck down some federal provisions that created a private regulatory body to inspect and discipline public-company accountants, but the decision doesn't dismantle the accounting board or invalidate the 2002 Sarbanes-Oxley Act as some critics would have liked.

The high court, in a 5-4 opinion by Chief Justice John Roberts, found fault with some parts of the Public Company Accounting Oversight Board, which was created as part of Sarbanes-Oxley to combat corporate accounting scandals in the wake of collapses at Enron and WorldCom.

Congress had given the five-member board, a not-for-profit corporation, broad regulatory authority over accounting firms that audit publicly traded companies.

Roberts said the structure of the accounting board violated constitutional separation-of-powers principles because it was too difficult for the president to remove board members.

"The president cannot take care that the laws be faithfully executed if he cannot oversee the faithfulness of the officers who execute them," Roberts wrote.

The court, however, refused to strike down the accounting board in its entirety, saying the board's mere existence didn't violate the Constitution.

PCAOB said it will continue to run all programs as usual, and no legislation will be needed to bring it in line with the Constitution. "We are pleased that the decision allows the PCAOB to continue without interruption to carry out its important mission of overseeing public company audits," said PCAOB Acting Chairman Daniel L. Goelzer.

Roberts said Sarbanes-Oxley "remains fully operative as a law." He said the unconstitutional provisions governing the board could be severed from the rest of the law.

The authors of the accounting law, in a joint statement, said "PCAOB provides essential protections to the more than half of American households that invest savings in securities."

"The decision from the Supreme Court adjusts the law in a way that allows the PCAOB to continue to ensure the integrity of public company audits," said former Sen. Paul Sarbanes (D., Md.) and Rep. Michael Oxley (R, Ohio).

Roberts said the Securities and Exchange Commission will now have the authority to remove board members at will. Previously, the SEC could only remove members for good cause.

"I am pleased that the court has determined that the board's operations may continue and the Sarbanes-Oxley Act, with the board's tenure restrictions excised, remains fully in effect," said SEC Chairman Mary Schapiro. "The PCAOB is a cornerstone of the Sarbanes-Oxley Act and serves a critical role in promoting investor protection and audit quality."

The accounting industry also applauded the ruling. "This is the least disruptive decision," said Center for Audit Quality Executive Director Cindy Fornelli. "We're pleased the court made it clear the PCAOB could continue to function....It's important for investors."

Barry Melancon, president of the American Institute of CPAs, said, "The court rejected a transparent attempt to undermine the post-Enron reforms that have served our financial markets well."

The decision could be considered a setback for those looking to get rid of accounting rules. "They could have struck down the whole [Sarbanes-Oxley] law and they obviously did not do that. For critics of the law, that means much narrower relief," said Hans Bader, an attorney at the Competitive Enterprise Institute, which was co-counsel for the plaintiffs in the case.

But Bader posited that the ruling could call into question previous rulings from the PCAOB because it wasn't accountable to higher-ups in the administration at the time it made those rules.

Free-market advocates who don't like Sarbanes-Oxley saw some good in the decision. PCAOB now is "tied more closely with the administration," said Cato Institute Senior Fellow Ilya Shapiro. "It removes the ability of the president or the administration to say, 'We don't control these guys.'"

The court's ruling fell along its ideological fault lines, with the conservatives in the majority and the liberal justices in dissent.

Justice Stephen Breyer, writing for the dissenters, said the accounting board raised no constitutional concerns.

"The court's contrary holding threatens to disrupt severely the fair and efficient administration of the laws," Breyer wrote.

Citing Breyer's dissent, Senate Judiciary Committee Chairman Patrick Leahy (D., Vt.) said he is "very disappointed" in the decision because it could call into question agencies created by Congress to combat fraud and inefficiency.

"Congress has established dozens of agencies which serve as indispensable corporate watchdogs and whose oversight provides a check on the power of Wall Street," Leahy said.

Rep. Paul Kanjorski (D., Pa.) said he is disappointed in the Supreme Court in some regards, he is glad the PCAOB will be able to continue its work.

A free-enterprise group and a Nevada accounting firm had challenged the legality of the board, arguing that it violated constitutional separation-of-powers principles.

The challengers argued that Congress vested the accounting board with widespread and unsupervised government power that couldn't be checked by the president or the head of a government department.

This is just a sample of the information he provides. My comments are in red. I believe his quarterly newsletter is 179.00. A little too pricey for me.

1) The Only Certainty in Life: Taxes are Rising. If you are looking for irrefutable proof that we’re all screwed, take a look at the chart below from my friends at Clusterstock. It shows that $2,000 in tax increases will be needed per household to cover increased government social service spending by 2015. This figure then soars to a mind blowing $12,636 by 2050, by which time I will hopefully be dead (me too).

We are now paying the piper for 30 years of tax cuts and spending increases at the state, federal, and municipal levels, and there is absolutely no way to avoid this. The unwind could take 30 years. Personally, I am an optimist, thinking it will only take 20 years. I will probably be dead by then too. I have given up any hope of ever collecting social security (me too), even though I qualify in a few years. You can’t blame any one political party for this sorry state of affairs (many are a bunch of psychopathic greedy sob's in bed with the banksters).

It has been a tag team effort to get the accumulated federal budget deficit up to $13,119,120,115,616 as of 3:00 PM EST today, although Republicans have historically been the big spenders with their defense appropriations. Remember Ronald Reagan’s star wars and the 600 ship navy? Star wars never worked, and the ships are now mostly rusting in mothballs. Yes, I know we had to outspend the Ruskies into oblivion to win the cold war (but we will be joining them soon).

We did it all on an American Express card, and have been rolling over the balance ever since. If we don’t surrender our credit cards now, the bond markets will eventually take them away and cut them in half in front of our disappointed faces. I believe that the winner of elections from now on is basically irrelevant (as do I), as our problems have grown to the point of insolvability. Cut taxes? The deficit soars. Cut spending? We go back into a depression. Do nothing? The deficit soars and we go back into a depression. My solution? Make as much money for myself with the ideas you find in these pages, and let the world sort itself out (now isn't that exactly what I have been saying?). The great certainty in this life is that your taxes are going up, no matter who is in charge. There! I’ve had my rant. Have a nice day.

ASHER MOSES

June 25, 2010

The architect of the bill ... US Senator Joe Lieberman. Photo: AP

The US senators pushing a controversial new bill that some fear would give President Barack Obama the powers to seize control of and even shut down the internet have rejected claims it would give Obama a net "kill switch".

The bill, titled Protecting Cyberspace as a National Asset Act, has been unanimously approved by the US Homeland Security committee and will be put to a vote on the Senate floor shortly.

Lobby groups and academics quickly rounded on the bill, which seeks to grant the President broad emergency powers over the internet in times of national emergency.

Any internet firms and providers must "immediately comply with any emergency measure or action developed" by a new section of the US Department of Homeland Security, dubbed the "National Centre for Cybersecurity and Communications".

The critics said that, rather than combat terrorists, it would actually do them "the biggest favour ever" by terrorising the rest of the world, which is now heavily reliant on cyberspace.

Australian academics criticised the description in the bill's title of the internet as a US "national asset", saying any action would disrupt other countries as most of the critical internet infrastructure is located in the US.

This week, 24 privacy and civil liberties groups sent a letter raising concerns about the legislation to the sponsors, including that it could limit free speech and free inquiry, Computerworld reported.

"We are concerned that the emergency actions that could be compelled could include shutting down or limiting internet communications," the letter reads.

But the architects of the plan, committee chairman Senator Joe Lieberman and Senator Susan Collins, have this week released a "Myth v. Reality" document that hits back at these criticisms.

They say the threat of a catastrophic cyber attack is real and not a matter of "if" but "when". Cyber crime was also costing the US economy billions of dollars annually and the bill would "modernise the government's ability to safeguard the nation's cyber networks from attack and will establish a public/private partnership to set national cyber security priorities".

The senators rejected the "kill switch" claim, arguing that the President already had authority under the Communications Act to "cause the closing of any facility or station for wire communication" when there is a "state or threat of war".

They said under the new bill the President would be far less likely to use the broad authority he already has under current law to take over communications. It would provide "a precise, targeted and focused way for the President to defend our most sensitive infrastructure".

Any action would be limited to 30-day increments and the President must use the "least disruptive means feasible" to respond to the threats. Action extended beyond 120 days would need Congressional approval.

The bill would not give the President the authority to take over the entire internet, target specific websites or conduct electronic surveillance.

"Only specific systems or assets whose disruption would cause a national or regional catastrophe would be subject to the bill's mandatory security requirements," the senators wrote

Hopey also came up with a brilliant idea on the BP mess, but I have no link, I cannot vouch for the accuracy of these numbers. QB

It seems like a miracle that our beloved leader was able to convince BP to establish a $20 billion slush (oops, escrow) fund to compensate those hurt by the ongoing oil plume in the Gulf of Mexico. After all, he had no constitutional power to force them to do so; so had to resort to Chicago-style negotiating.

But, let us take a closer look at the effect on BP’s finances:

1. BP will establish a $20 billion fund, but will pay only $7 billion into it during 2010.

2. BP is a British corporation, but has a very large operating entity in the US.

3. By Generally Accepted Accounting Principles (GAP), BP must book the entire $20 billion expense in the year accrued. Therefore, they will book a $20 billion expense in 2010, reducing their US tax liability by $7 billion.

4. Our dear leader also convinced this massive corporation to show their concern for the “small people” by withholding dividends to their shareholders for the last 3 quarters of 2010. This reduces their outward cash flow by about $7.5 billion, including approximately 40% of that amount to US citizens. Assuming that the Bush tax cuts will survive through 2010, the US Treasury will lose another $450 million in taxes on that amount. We won’t even discuss the effect on the US economy.

Let us put the results into a table easily understood by the small people:

· BP Cash Flow:

o Escrow funding ($7 billion)

o Dividend saving $7.5 billion

o Tax savings $7 billion

o Net favorable cash flow : $7.5 billion

· US Treasury Tax Receipts:

o BP Corporate income tax ($7.5 billion)

o BP Shareholders ($0.45 billion)

o Net unfavorable tax receipts ($7.95 billion)

I guess we really should expect this. After all, our dear leader is the most inexperienced man in any room he walks into.

BP's Eventual Bankruptcy Is Certain

By James West contributer to Seeking Alpha

There is no doubt that BP (BP) will not emerge from this oil spill disaster intact. Make no mistake – this is the fatal black swan event in BP's life that is going to take investors by the hundreds down with the ship. Its not going to happen immediately. Much like the slow initial fall and eventual breakneck pace of collapse of a giant tree, the giant oil leak is the event that will catalyze the fall of this far flung and storied company.

Here's some food for thought in support of my prediction. I also caveat that statement with the possibility that a 'merger' or 'buyout' will be forced and negotiated out of public view to offset political carnage. Either way, shareholders and taxpayers alike will burn.

What they're still touting as the "worst environmental disaster in US history" is quickly growing up into the worst environmental disaster in the history of humanity. With the unprecedented scale and scope of this astonishing catastrophe, BP will likely not survive. There are reasons for this which are not currently part of the mainstream analysis. But the mainstream is reactive, and to some degree compromised by conflicted cross ownership of shares in both big oil and big media.

When will the actual rate of flow be known? At this point, it grows weekly.

What will be the long-term effect of such a severe and unprecedented change in ocean chemistry within the Gulf? Might this trigger some sort of domino effect that can spread to the rest of the world's oceans? Will the Gulf become a pelagic desert?

These are questions that lurk along the outer reaches of a lot of minds of late. With BP now acknowledging that it will likely be at least August before the leak is brought under control, its share price is plummeting, and that makes the 100 year old company both a takeover target and a bankruptcy concern.

Never mind any semblance of moral imperative – this disaster has already upset the entire offshore drilling industry, and with the clamor growing around the world, you can bet that serious – and expensive – legislation curbing the industry's growth is inevitable. Besides banning offshore drilling off Alaska and the entire eastern seaboard (which has already happened), the new rules governing the procedures of exploration and extraction of offshore hydrocarbon resources are going to make the commodity and the final product more expensive. We are obviously going to see new safety requirements and probably requirements for substantial contingency funds.

But it's the legal and financial exposure that BP is going to be desperately seeking ways to avoid. Its safe to say a good portion of the days of BP CEO Tony Hayward are devoted to ducking responsibility for the event. BP's history is rife with incidents involving collusion, perjury, political interference, and other chicanery. As the price plummets further and further downward in a self-perpetuating cycle that only increases downward momentum, the company might soon cease to exist.

What does that mean for the Gulf coastline and the years of damaged economy and ecology?

Well first of all, any takeover/rescue deal of BP involving another major oil company is going to involve a negotiation with the United States government to cap the financial exposure and legal responsibility for the cleanup. The acquiring company will argue that the assets and earning power of the acquired BP assets must be unencumbered by any unknowns such as where the limit might be on the actual cost of damages. They will furthermore argue, at precisely the right moment, that the alternative is let the company go completely bankrupt, and stick the American taxpayer with the bill.

“There is a massive, rotting pool of mortgages on bank balance sheets.…There is no doubt there is going to be a double dip in housing,” said Meredith Whitney, CEO of the Meredith Whitney Advisory Group.